Life insurance is a widely recognized way of helping to lift the financial burden of your surviving loved ones in the event of your untimely death. This is especially important, of course, if they depend on you for their own financial support – such as a surviving spouse, children, or adolescents with university or college fees still to pay.
Although the principles may have remained largely unchained, life insurance has developed into an increasingly sophisticated and diverse form of financial planning and protection – including life policies specifically tailored to the needs of those over the age of 50.
So what are some of the considerations to take into account in making an over-50 life insurance comparison?
Life insurance or life assurance
- the government-backed site Money Advice Service, for instance, suggests that one of the first, important distinctions to make is between life insurance and life assurance;
- life insurance guarantees the payout of an agreed sum in the event of your death before a given age;
- life assurance (also known as whole of life insurance) guarantees a payout whenever you die and is therefore more expensive and generally considered to be a form of long-term investment;
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Term life insurance
- there are a number of different types of term life insurance, including those with the particular concerns and requirements of the over 50s in mind – and for which you might want to consult a specialist provider of such policies;
- perhaps one of the key considerations when making an over 50s life insurance comparison is the comfort of knowing that monthly premiums are fixed throughout the term of the life cover offered;
- this might make an alternative form of life cover in which premiums steadily rise – reflecting the increased risk of death within the specified term – perhaps less attractive to those over the age of 50;
- another, typically more expensive option is increasing term life insurance in which the guaranteed sum paid out in the event of your death before the agreed date steadily increases year on year, or is pegged to increases in the retail prices index;
- a popular and potentially cheaper form of cover is decreasing term life insurance, in which the sum paid out steadily decreases over each year of the agreed term;
- the latter may be especially useful to protect a standard repayment mortgage, in which the outstanding mortgage balance is also steadily decreasing year on year – and is therefore commonly termed mortgage life insurance.
Over 50s life insurance
This is a specific product aimed at people aged 50 plus who have been refused life insurance elsewhere – perhaps due to a pre-existing medical condition.
Over 50s life insurance policies are a way to get guaranteed cover, without a medical questionnaire.
The sum insured (i.e. the amount that is paid out when you die) typically is at the lower end of the spectrum compared to the more traditional life insurance policies – around £5,000 to £10,000.
This means that those you leave behind are unlikely to be able to clear the mortgage with the policy proceeds. But the amount can still be useful, say to leave a cash sum, or for your family to put towards your funeral costs.
Choosing the most suitable policy
Life insurance is probably one of the most popular, simple and straight forward ways of protecting your family and dependents, by providing them an element of financial security in the event of your untimely death.
If you are over 50, there are life insurance solutions that may be tailored to your specific needs and circumstances. Understanding what you require from your cover, then comparing the different products available, will typically enable you to source the most appropriate cover.